GBP/USD Rallies Despite US Tax Updates

GBP Up Against USD On Improved Economic Outlook

The Great Britain pound gained during the recent trading session against the U.S. dollar due to a positive gross domestic product reading in the United Kingdom previously revised from the third quarter.

Economists have noted on the positive third quarter based on the third quarter reading looking at the early fourth quarter reading which showed positive and mostly upbeat gains in the fourth quarter with the annualized rate at around 2.5% to 3.0%.

Later in the week, a manufacturing output reading would be released. Analysts are mostly expecting the output to slightly rise during the month of November enough to push the Sterling higher against the U.S. dollar.

The sterling also rallied on reports of a possible agreement in principle on the Irish border. By Thursday’s session, the currency has gained for the third session a row despite opening mostly lower during the start of the week.

UK Economy Risk

Although the improved economic outlook in the United Kingdom sent the GBP to trade higher against the dollar, others have warned against the possibility of the economy’s direction taking a downside in the near future.

Official reports released on Thursday revealed that net migration to Britain has slipped the most in the twelve months that followed after the Brexit vote showing a drop of more than three quarters in the European citizens leaving the country as well as a decline in the number of those arriving.

While this is one of Theresa May’s primary purposes, some have largely voiced out their concerns on how this could impact the economy.

GBP vs USD

The GBP recorded a month-high on Thursday against the US dollar on growing market concerns of an ongoing Brexit deal, agreement, and proceedings. The U.S. dollar index despite hitting 93.23 was down by 1.29% for the month of November against six other major currencies.

Despite the greenback trading higher against most currencies, it failed to gain higher against the euro and the sterling due to the doubt of some investors in the upcoming proceedings of the Republican Senate tax reform which will be open for debate later during the day.

While the tax reform bill was passed by the Senate Budget Committee resulting in a full Senate vote cutting market concerns from a previous pushback from major Republican lawmakers.

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